RABI’UL-AWWAL 19, 1429 A.H
THURSDAY, MARCH 27 2008
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For an effective fight against corruption (I)
By Colonel Abubakar D. Umar (RTD)
Forwarded By Harc Omenyi
harc.omenyi@drsconcepts.com
The recent threat by former Abia State Governor Chief Orji Uzor Kalu to make Nigeria ungovernable if the Federal Government or its anti corruption agencies continue to investigate and prosecute former Governors while former President Olusegun Obasanjo and his ministers are not subjected to the same treatment may appear to many as empty threat or blackmail but I honestly share Orji Kalu’s concern, even if I don’t endorse his threat. I also believe that the war against corruption will continue to be ineffective and will actually be meaningless when only a small segment of former public servants are targeted as was the case in Obasanjo’s selective war against corruption. There is no doubt that many of the former chief executives have cases to answer for the gross abuse of their offices and they have to be called to account. They cannot use, as their defence, the argument that “we are not alone” in such abuses. The message of Orji Kalu is that what is good for the goose is also good for the gander. After all, the Obasanjo presidency, where over 56% of the corruption allegedly took place, controlled 52% of the nation’s revenue.
Although the Umaru Yar’adua administration has been making efforts to reinvigorate the war against corruption in line with his self-imposed “rule of law” mantra, most Nigerians remain unimpressed. The only reason why the routine redeployment of AIG Nuhu Ribadu, EFCC Chairman, generated so much public interest is the popular perception that this government, like its immediate predecessor, is insincere in its fight against corruption.
I am convinced that the Yar’adua administration appreciates the very negative effects of corruption on the socio-economic and political development of the nation. It cannot fail to realize the very serious damage that the Obasanjo administration caused to this nation as a result of that administration’s monumental corruption, I want to believe that this administration will do all it can to distinguish itself from the hypocritical regime of Chief Olusegun Obasanjo by prosecuting a sincere and purposeful war against corruption. Actually President Yar’adua has no option than to do right to all manner of people according to law without fear or favor, affection or ill will, as he swore to do. In fact the Obasanjo probe has already started what with al! the revelations originating from government on serious acts of sleaze perpetrated by Obasanjo’s government. This administration must also be fair to president Obasanjo, members of his administration and his cronies by giving them an opportunity to defend themselves against all allegations. The general perception currently is that Obasanjo is the most corrupt former African leader living or dead. This is very tragic considering his earlier deification, of course largely based on his claims to piety and holier than thou attitude. This idol must be given the opportunity to redeem itself. A probe will appear to be the best option. In choosing this path, government must not entertain the fear that it will lead to the polarization of the nation or that it will be accused of betrayal and witchhunt since there are precedents. All past administrations have faced some kind of probe. The Obasanjo administration itself probed and sanctioned both the Abacha and Abdulsalam’s administrations. Obasanjo was hailed for his efforts in exposing and recovering Abacha’s ill gotten wealth.
The following areas and many more need to be investigated. Needless to say that the facts I supplied below are mere allegations that need to be probed. 1 have been constrained in my research by lack of easy access to official documents which will not be a problem to any government commissioned probe panel.
In The Beginning. The first salvo fired by President Olusegun Obasanjo in his well publicized war against corruption on his inauguration on 29th May 1999 was the revocation of all contracts awarded between January to April 1999 by his immediate predecessor, Genera! Abdulsalam Abubakar, on the allegation that all those contracts were hurriedly and dubiously awarded. To most observers this action was proof enough of the seriousness of the new president in this promise to prosecute a war against corruption in which there would be no sacred cows and his resolve to confront all culprits irrespective of their status. How else could one interpret this move considering the crucial role played by General Abdulsalam in releasing Chief Obasanjo from jail and pardoning him of the conviction of coup plot against Abacha’s government and making his election as president possible.
This ‘act of courage’ soon revealed itself as a ruse. The sinister motive soon manifested. It was, as it tuned out, not aimed at sanitizing the system but the first act of sleaze shrouded in messianic garb, soon to become the hallmark of the Obasanjo anti corruption and other administrative policies. Most of these contracts were later reviewed upwards and re-awarded to some of the same companies after they might have paid bribes. Not many Nigerians are aware that the mysterious N700 Million which Obasanjo entrusted to his estranged friend Chief Otunba Fasawe and which was revealed at the PTDF Senate probe was probably part of the proceeds from this scam.
NNPC. Nigerians vigorously questioned the rationale of a president choosing to add to his burden by taking over the direct control of the busiest Ministry, that of petroleum, and refusing to give it up despite persistent insinuations and innuendos regarding his selfish motives.
Forensic look at the modus operandi of Obasanjo’s control of this cash-cow will reveal that the public is right in its suspicious all along. Let’s look at the facts of a few cases.
REFINERIES
The Obasanjo administration inherited refineries that were largely unserviceable, operating much below their 450,000 barrels per day installed capacity. The president promised to reverse the trend. Repair contracts worth hundreds of millions of Dollars were awarded for this purpose. It was money thrown down the drains as the refineries continued to loose their refining capacities, which fell from 250,000 barrels per day as at May 29, 1999 to about 150,000 barrels per day by 2001. No explanation was given for this. No one was held accountable. In a surprising move the government directed an increase in the crude allocation to NNPC, for local refining and use, from 300,000 barrels per day to 450,000 barrels per day as if the refineries are functioning at full capacity. What could be the reason behind this? Well, the NNPC was supplied crude for local consumption at a heavily subsidized rate. For example, by 2001 when president Obasanjo decided to increase the local allocation, a barrel of crude was selling at $35 per barrel on the international market. NNPC was being charged $18 per barrel. Now since the refineries had a refining capacity of 150,000 barrels per day, NNPC had excess of 300,000 barrels at the subsidized rate which was exported making a profit of 300,000 barrels per day multiplied by $17 per barrel which comes to $5,100,000 profit for NNPC. The crude allocation was paid in local currency, the Naira. For some inexplicable reason, NNPC paid the CBN at the rate of N110 to the Dollar instead of the prevailing forex rate of N135 to the Dollar. Again, there has not been any explanation for this under payment.
There are two issues that only a probe can resolve:
a) How was the $5,100,000 per day utilized?
b) What informed the decision to discount the Dollar by about N25 and who authorized this?
NNPC’s explanation to the first query that the profit was used for import of petroleum products is unconvincing because the expenditure is an appropriation matter that needed to be approved by the National Assembly and there is no evidence to prove that such approval was ever sought or obtained. The contracts were never a subject of Federal Executive Council consideration and approval therefore lacking transparency. When the RMAFC raised queries, the president felt intimidated enough to set up a committee to investigate allegations of impropriety. One of the findings of the committee was that NNPC’s benchmark prices were in some cases higher than the ones quoted by major trading companies. The report was so damaging to the president and NNPC that he quickly suppressed it. Business as usual continued.
CRUDE OIL CONTRACTS
No where has president Obasanjo shown so much disdain for due process and displayed greed and crass opportunism as in the management of crude oil contracts. The nation was defrauded tens of billions of Dollars in the most opaque and criminal contract process, which was handled between the president and his willing accomplice, the GMD NNPC.
It will interest Nigerians to know that all crude oil lifting contracts signed by the Obasanjo administration were only advertised once. All subsequent awards were done through a roll over. This was achieved through an arranged delay in notification of the expiration of the ongoing contracts. The GMD NNPC writes to the president seeking his approval to roll over the contracts citing lack of time to adhere to a proper procedure and the president willingly approved. In this way due process was circumvented.
It is safe to say that NNPC contracts were not subject to due process verification, The president decided on the terms. So also were winners and losers decided by president Obasanjo. In some cases, the winners were companies with dubious profiles. They won huge contracts on account of their close relationship to the president or members of his family. For example, Petrodel Resources Ltd which got one of the highest allocations of 90,000 barrels per day was initially not known to NNPC consultants based in London. On further inquiry, it was discovered to have been registered in Isle of man as a one man registered company. This fact was made known to the president by the investigative panel which he set up to probe the crude oil contracts in September, 2003. Once again, no action was taken to correct the system.
LPFO Scam
Scarcity of Low Pour Fuel Oil, a cheap source of energy for the nation’s industries, led to the unprecedented closure of many of them. An estimated 60% of the industries were known to have totally shut down with the remaining operating at a very low capacity. But what could have been responsible for this scarcity when some of the refineries were still producing this product, at least enough to satisfy the need of our local industries?
Once again, it is all to do with the insatiable appetite of the president and his business associates for wealth. It is the story of wickedness, lack of patriotism and greed. Towards the end of 2002, an Obasanjo business associate, who had grown weary of the president’s cash demands on him, broached up an idea on how to raise funds for the 2003 presidential election campaign. If only the president would cause the NNPC to allocate large quantities of LPFO to his companies at the local price he would export and sell at international market price and contribute part of the proceeds to Obasanjo campaign fund. The president saw this as a brilliant idea and immediately instructed GMD NNPC, Mr. Gauis Obaseki to implement. About one million metric tonnes of LPFO was allocated to one of the businessman’s companies at the subsidized rate of N8.20k per litre. Over 90% of this allocation was illegally exported and sold at the prevailing international market price of about S187 per tonne. The customs was evidently instructed not to record the export but this was recorded by the USA library of congress. Some other companies were similarly allocated huge quantities of this products.
A senior adviser to president Obasanjo was so incensed by this scandal, which he naively thought was not known to his principal, that he reported to him. The president faked ignorance. To demonstrate this, he summoned the GMD NNPC in the presence of the adviser and informed him about what he termed the shocking report which was just given to him by this patriot, the adviser. He instructed the GMD to verify the facts. The GMD left certainly amused by the president’s con act. No further action was taken by the GMD as non was expected. The scam continued. Those of us who had knowledge of this scam were incredulous by the president’s attempt to resuscitate textiles industries with a Federal Government loan of N70 billion. Perhaps it was an attempt at atonement but this failed because all the cheques issued proved dud.
